AUD/NZD is trading at around 1.1550 after cautious remarks from RBA’s Hauser. He mentioned that a shift away from restrictive policies could influence future decisions. Meanwhile, the NZD is weakening as a 25-basis-point rate cut by the RBNZ approaches. The currency pair is holding steady after more than a 0.25% decline in the previous session, currently at levels last observed in September 2013. The Australian Dollar may gain support due to the RBA’s outlook, with Consumer Confidence rising by 12.8% in November to a level of 103.8.

NZD Rate Cuts Pressure

The NZD is under pressure from anticipated RBNZ rate cuts, with a 10% chance of a deeper 50-basis-point cut as the economy inches closer to recession. RBNZ Inflation Expectations for Q4 remain steady at 2.28%, within the desired range. The Reserve Bank of Australia (RBA) aims to manage monetary policy to ensure price stability, which supports the AUD through interest rate actions. High inflation usually leads to rate hikes, attracting capital and boosting the AUD’s value. Quantitative Easing (QE) and Tightening (QT) affect the AUD differently. QE, through asset purchases, usually increases liquidity but weakens the AUD. In contrast, QT involves stopping purchases, which could strengthen the AUD. Currently, there is a clear gap between Australian and New Zealand monetary policies, presenting opportunities for derivative traders. The Reserve Bank of Australia appears hesitant to ease rates, while the Reserve Bank of New Zealand is likely to lower its rate to 2.25% this month. This fundamental difference signals continued strength for the AUD/NZD pair.

Economic Indicators Favor AUD

The RBA’s cautious stance is supported by strong domestic data, which is a positive signal for the Aussie dollar. Australia’s unemployment rate recently dropped to 3.8% according to the October 2025 report, with the latest quarterly CPI reading at 3.1%, slightly above the RBA’s target range. These figures make it unlikely for the RBA to ease policies soon. In contrast, the New Zealand dollar shows signs of weakness. New Zealand’s unemployment rate has risen to 4.5%, a stark difference from Australia’s, as the economy faces challenges following the earlier technical recession in 2025. As a result, Overnight Index Swaps markets are currently predicting a 95% chance of a 25-basis-point rate cut this month. Given this situation, traders may want to explore strategies that benefit from a rising AUD/NZD. Options might include buying call options with expiration dates in December 2025 or January 2026. The cross recently reached 1.1590, its highest point since 2013, indicating a significant technical breakout. This momentum suggests the pair could rise further, especially following the anticipated RBNZ decision. Create your live VT Markets account and start trading now.

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